The National Living Wage is to rise by 6.7%, from £11.44 to £12.21 an hour from April 2025, the government announced last night (29 October).
The 6.7% increase is worth £1,400 a year for an eligible full-time worker.
The National Minimum Wage for 18 to 20-year-olds will also rise from £8.60 to £10.00 an hour – the largest increase in the rate on record. This £1.40 increase will mean full-time younger workers eligible for the rate will see their pay boosted by £2,500 next year. This marks the first step towards aligning the National Minimum Wage and National Living Wage to create a single adult wage rate, which would take place over time.
The move comes ahead of today’s Budget which will fix the foundations to deliver change by fixing the NHS and rebuilding Britain, while ensuring working people don’t face higher taxes in their payslips.
Chancellor of the Exchequer Rachel Reeves said:
“This Government promised a genuine living wage for working people. This pay boost for millions of workers is a significant step towards delivering on that promise.”
Kate Nicholls, Chief Executive of UKHospitality, said:
“These wage rises are well above expectations, and make the Budget even more important.
“It’s an added £1.9 billion to the hospitality wage bill, on top of the cost of the Employment Rights Bill and, if rumours about the Budget are true, employer NICs and business rate rises.”
“Trying to balance the books from the pockets of high street businesses will simply leave hospitality as collateral damage – threatening jobs, future investment, price increases for consumers, and business viability.”
“Businesses will be approaching tomorrow’s Budget with even more trepidation following this news. Our companies desperately want to be able to support higher wages for staff but what is being asked of them is simply unsustainable if taxes are going to shoot up at the same time.
“In light of this, it’s paramount that the Budget includes targeted measures to support the high street and the cost burden it is facing. That must start with addressing the broken business rates system and implementing a lower, permanent and universal level for hospitality.”
Michael Kill, CEO of the Night Time Industries Association says:
“Minimum wage hikes may seem like a win for workers, but for small nightlife and hospitality businesses already stretched thin, it’s at breaking point. These increases must be balanced and affordable for businesses, or we risk being counterproductive, cutting shifts and jobs as companies streamline just to survive.”
“This feels like a distraction from the main budget. Just like the Tory announcement on NLW increases, we expected a more transparent and straightforward discussion, especially since these decisions directly affect people’s livelihoods and the future of businesses.”
“The fear across the sector is real and should not be ignored; the Government’s lack of insight into how this impacts vulnerable sectors is deeply troubling.”
